Are digital and new media companies innovative?

Don't count on it.  I help companies to become more innovative.  One thing I have noticed is that the industry a company is in, or the market it serves, has very little influence over how innovative the company really is. 

Most people perceive that companies operating in digital industries are more innovative than companies operating in more traditional, tangible industries.  They must be, the logic goes, because they would not have existed 10 year ago.  Therefore they must be new and innovative.  And that may be true in some cases.

The reality is that in most cases, these companies are not innovative.  They exist because of innovations that have occurred in their industry, but very few that I have seen are operating in an innovative way.  Here two fundamental things innovative companies do that other companies do not do:

1)  They value consumers, and are always thinking about how they can improve a consumer's experience.  They not only talk about what a new technology can enable, they focus relentlessly on how their product or service fits into the consumer's lifestyle.  These companies learn about what consumers value.  As a result, the products and services they develop are valued.  Any company that only learns what consumers say they want will be sadly misguided, and will not be able to create a meaningful offering.  Really understanding consumers is different.

2)  They create opportunities to compete in new ways.  Once they understand what consumers value, a world of possiblities opens up to ways to provide value.  And value is something consumers are willing to pay for.  Innovative companies do not limit the ways in which they can offer value.  They develop new processes and capabilities to provide value, and figure out how to do things they've never done before.

Notice what is not on the list:  Streamlined processes.  Well-defined, detailed tasks before a new project begins.  These things are important for running a business; for delivering what you currently offer in an optimal way.  But they do not make a company innovative.  They only enable you to do more of what you already do.  And paradoxically, that's the operational focus of most digital firms.